[Rule of Law Online] The godfather of pyramid schemes was arrested
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CCTV International www.cctv.com May 9, 2006 17:59 Source:
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The godfather of MLM
MLM "classroom"
CCTV.com News (Rule of Law Online):
After careful investigation, the police cracked a large pyramid scheme.
During the trial, the mysterious figure surfaced.
Please watch the first scene.
The godfather of pyramid schemes was arrested.
Moderator: Welcome to Rule of Law Online. On the morning of May 9th, 2006 10, the Ministry of Public Security held a press conference in Beijing, and announced the results of the "Lu Jian" campaign against pyramid selling crimes. What deserves people's attention is that on March 2 this year, a man named Yang was arrested by the Procuratorate of Zibo City, Shandong Province on suspicion of illegal business operation. Behind Yang, there is a huge MLM network involving about 15 provinces and cities across the country. Yang himself is called the godfather of MLM in the organization. So what is the godfather of pyramid selling behind the veil, and how did he form such a huge pyramid selling organization?
On the morning of June 23, 2006, a middle-aged couple with a northeast accent appeared at Beijing Capital International Airport. They wanted to fly to Hong Kong from here, but they failed to set foot on the gangway. At the border crossing, a detention permit from Zibo blocked their way. This couple, Yang and his wife, are known as the originator of pyramid selling in China.
Suspect Yang: When people choose pyramid selling, he is an irrational mentality.
June, 2004 is a special day for the economic investigation police in Zibo. After more than a year of careful investigation, the mega-pyramid scheme code-named "4.08" was completely solved. The destroyed pyramid scheme dens involved 15 provinces and cities, with more than 60,000 people/kloc-0, involving more than 400 million yuan. As the biggest pyramid scheme in China so far, the detection of this case is exciting. More importantly, the police found that behind this case, a mysterious figure called the godfather of pyramid schemes was manipulating the whole pyramid scheme network.
Zhao Quanwen, deputy head of the Economic Investigation Detachment of Zibo Public Security Bureau: A very mysterious figure. He (Yang) rarely appears below the bottom line. Just heard some rumors about him, how to organize, how mysterious, how appealing.
This is the audio-visual materials obtained by the police in the process of handling the "4.08" case of the sales elite commendation meeting organized by MLM in 2000. At that time, this message did not attract their attention, but it was on this message that the project police met Yang for the first time.
Suspect Yang: My friends, all your efforts in the past sales process have paid off today.
Yang, a 35-year-old native of Anshan City, Liaoning Province, was recruited as a barber by a local service company after graduating from high school.
Wang Qiang (No.3 P5 in Shandong) of Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau studied with the master for three months and got a first-class barber from an apprentice. At that time, his master praised him very much and said that he was particularly clever. At that time, he said that he was persistent in everything except his own understanding.
In the early 1990s, Yang's unit began to implement the contract system. When he was less than 20 years old, he made a decision that surprised everyone and contracted his own beauty salon. At this stage, Yang met a girl 2 years younger than him and later became his wife.
However, the insatiable desire finally swallowed up Yang's happiness. 1994 An old customer in the store recommended a foreign product called "Swing Machine" to Yang and suggested that they listen to the explanation of the manufacturer. At that time, they never thought that this class would change their future life trajectory.
Yang's wife Liu: Because I do beauty, I feel very hard. I stay in that 100 square meter space every day, and every day is monotonous. Then by listening to the (MLM) class, I also saw that many people who do real estate and stocks are bigger than our business, and they all come to do this (MLM) industry. At that time, I thought this (MLM) industry was ok, so I said it.
What Yang and his wife saw was just a cover for the lecturer to teach MLM theory. Although the price of a set of 3,900 yuan was definitely not a decimal at that time, Yang, who wanted to make a lot of money, bought a set of 10 in one breath.
Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: He (Yang) likes challenges very much. After attending two trainings, he resolutely handed over the shop to others and participated in pyramid schemes without the consent of his family.
At that time, the organization followed the overseas five-level and three-level system, and it took only half a year for Yang to become a top A-level agent.
Yang's wife Liu: He (Yang) is smart and charming.
Yang, on the other hand, believes that the reason why he can upgrade quickly is mainly because he knows how to guess each other's psychology. Yang's wealth has also accumulated rapidly with his success in the pyramid scheme industry. 1998, with personal assets of nearly 4 million. However, it was in this year that the harm exposed by pyramid selling activities attracted the attention of relevant state departments. The General Office of the State Council forwarded the notice of the State Administration for Industry and Commerce and other departments on severely cracking down on pyramid schemes and disguised pyramid schemes. Since then, pyramid selling has been officially banned by the China municipal government.
In order to escape Yang's blow, he tried his best. Will the network collapse when MLM is banned?
In June, 2004, Zibo Economic Investigation Department found a telephone number in the residence of MLM personnel when handling the 408 MLM case. They hope to find more clues through this number. Zhai Hao, a member of the task force, said that in retrospect, this phone number should be their first contest with Yang.
At the same time: Zhaihao (Shandong 2P4), Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau, took many detours when we worked according to this telephone number, and the more we walked, the more we felt that something was wrong. At this time, we adjusted our fighting ideas in time and turned to continue to conquer this criminal suspect. The suspect said that we followed Shen, including Yang, and they had arranged for me to remember my phone number. My last four digits are 386544.
In order to escape the attack of the police, Yang and others began to use this method of recording telephone numbers in organizations around 1995, and explicitly asked offline personnel to pay themselves in cash, never through the bank. In addition, the "three noes" principle is stipulated in the network.
Zhai Hao, Economic Investigation Brigade, Zhoucun Public Security Bureau, Zibo Public Security Bureau: In addition to my online, I can give my real name, because he needs to provide his ID number, and I can provide his real name and real address to his online. Other roommates don't talk about their real names and addresses. The third is not to talk, that is, after being discovered and captured by public security personnel, not to talk about who is online.
1In April, 1998, the state officially banned pyramid selling activities, because many people in the network under its control went offline one after another, and Yang's swing machine business stopped, but this was only temporary.
Suspect Yang: 1999, my friend and I came to do this business again.
This time, Yang chose a health product called perilla oil.
Yang's wife Liu: Health food perilla oil, you see these products were bought for more than 600 yuan when we went in and sold for 2340 yuan.
Reporter: What is your pricing principle?
Yang's wife: This may be related to its bonus system.
According to the national regulations, the bonus return ratio of direct selling activities should not exceed 30%, while the proportion adopted by Yang in his own network is as high as 62%. It is precisely because of this huge profit that in less than two years, Yang's perilla oil MLM team has grown from the initial 3 or 4 people to more than 5,000 people.
In the same period: Wang Qiang, Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: Is he facing normal consumers? Normal people won't buy this product, so in fact, he can only buy and sell products by developing teams and personnel online. This is actually the case, and it actually works like this.
Suspect Yang: At that time, many people blindly chose this industry. If you are like foreign countries, in the direct selling industry, most people, 90% people choose products to join, while in China, the situation is just the opposite.
It is through this pyramid structure that Yang's wealth expanded rapidly again. At the same time, Yang's worries about are increasing day by day.
Yang's wife, Liu: I found that the people are particularly chaotic and have low quality. After some people earn money, they can't control it well and spend it carelessly.
Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: He (Yang) thinks that this team will have an accident sooner or later.
In 2002, Yang led his team and became a branch of a well-known company in Tianjin. Although this company gave Yang's team a legal coat, the strict management system also greatly reduced the income of team members, so some people left his organization one after another.
Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: He (Yang) can effectively eliminate those redundant personnel in this way, and those who really stay to work with him may be considered by him to be some hardcore and loyal partners or offline personnel.
After realizing the team's self-elimination, Yang registered and established Beijing International Chain Store Co., Ltd. in Beijing at the end of 2003, and quickly set up 13 franchise stores all over the country.
Illegal pyramid schemes put on a legal coat; Sophisticated, still can't escape the French Open.
He was at the B level of Yang's network at the time of the crime. He said that many of them are suspicious and hesitant about the legality of this marketing method conducted by the Internet. At this time, Yang and other senior figures in the team gave them such an explanation.
Xu: He said, I asked you whether we have a marriage law or get married first in China. I said we should get married first. He said it was right. After we get married, we can only establish a marriage law and go through a process. He said it was right. We are now at such a stage, on the edge of the law.
At 3: 30 pm on April 8, 2004, the police in zhoucun district, Zibo City, Shandong Province destroyed a pyramid scheme den located in a building, thus uncovering the tip of the iceberg of the "408" mega pyramid scheme. At this time, it was less than five months since Yang's company opened.
This Ikong company sells a set of five-piece cosmetics marked "International". The purchase price of 500 yuan is as high as 2980 yuan.
Yang's wife Liu: The biggest salesman in the team, the highest (bonus) may return to 70%.
Although Ikong is a legally registered enterprise, its business model still continues the five-stage and three-stage pyramid scheme. But in order to avoid people's eyes and ears, it has a new name, called five-star system.
With the deepening of the investigation of 408 cases, the number of police teams has gradually increased. On June 25th, 2005, Shen, who had been engaged in pyramid schemes with Yang since 1998, was arrested in Jilin. Since then, Yang and his company have officially entered the police's sight.
Yang's wife Liu: At that time, I kept seeing Shen 408 (reporting the case) and always thought that everything that should happen would happen.
Maybe I knew this day would come. Yang did not use his own name when registering the company, and the names of husband and wife were not seen in the company's shareholder list, which made it very difficult for the police to obtain evidence, but the case finally made a breakthrough.
Zhai Hao, Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: Jinan Industrial and Commercial Bureau once gave instructions on illegal pyramid selling and copying in Ikong, Jinan. After the call to Ikong, all the criminal evidence came out, pointing directly at Beijing and Ikong.
At the headquarters, the task force finally found direct evidence of Yang's organization and participation in pyramid schemes. 20061Oct 23rd, 65438, Yang and his wife left Beijing for Hong Kong with their children.
Zhai Hao, Economic Investigation Brigade of Zhoucun Public Security Bureau of Zibo Public Security Bureau: In the pyramid scheme industry, he (Yang) has an obvious physical feature, what physical feature, a big back, deliberately keeping this hairstyle, deliberately wearing it, and very ostentatious. His wife forced Yang to change his hairstyle. After Yang Yiyong had his hair cut, he remained silent for a long time until the day he was caught at the airport. Yang Yiyong said something to his wife. I knew something would happen today, because changing my hairstyle changed my life.
On June 23, 2006, Yang was arrested by the police at the Capital International Airport. But it was not the hairstyle that changed his life, but the greed that haunted his mind.
What are the forms of pyramid selling crimes and how will pyramid selling participants be dealt with? Stay tuned for Rule of Law Focus later.
Focus on the rule of law: crack down on pyramid schemes according to law
Moderator: It is understood that since April last year, in the "Lu Jian" campaign against pyramid schemes organized by the Ministry of Public Security, the public security organs in Shandong Province have destroyed 267 pyramid schemes and arrested 995 people involved. So what are the forms of pyramid schemes? And what will these people involved in pyramid schemes do?
MLM originated in America. It is a business model in which MLM personnel directly meet customers to sell goods. MLM was introduced into China in the early 1990s. After experiencing the process of free development and restricted development, its harmfulness was clearly exposed in the late 1990s. There are various forms of pyramid selling and disguised pyramid selling, including the development of interpersonal networks, the form of pyramid selling commodities, and the way that people only pay membership fees, develop the pyramid form of commodities, and use the Internet and other carriers to transmit disguised pyramid selling fraud information, and then develop network members among netizens. There are both pyramid schemes in the commodity field and pyramid schemes in the service field.
Professor Liu Renwen, Institute of Law, Chinese Academy of Social Sciences: When a social phenomenon is serious enough that other laws can't control it, it is considered to be governed by criminal law, so the Supreme People's Court issued a judicial interpretation on 200 1.
In the Official Reply of the Supreme People's Court on How to Define Serious MLM or disguised pyramid selling, serious pyramid selling or disguised pyramid selling is defined as the crime of illegal business operation, which has played a certain legal guarantee role in cracking down on pyramid selling.
Professor Liu Renwen, Institute of Law, Chinese Academy of Social Sciences: According to this judicial interpretation, if the circumstances are serious, illegal pyramid schemes or disguised pyramid schemes can be sentenced to fixed-term imprisonment of not more than five years, and the illegal income 1 times or more and not more than five times.
Moderator: What will happen if an organization only relies on one-time membership fee distribution instead of sales profits of commodities? There is only one answer: the bottom of the pyramid-a huge group of ordinary members will be eliminated. This is the dirty reality of MLM organization under the guise of so-called equality and fairness.